When Minority Labor Migrants Meet the Welfare State

52 Pages Posted: 12 Jul 2007

See all articles by Bernt Bratsberg

Bernt Bratsberg

Kansas State University - Department of Economics; University of Oslo - Ragnar Frisch Centre for Economic Research

Oddbjorn Raaum

University of Oslo - Ragnar Frisch Centre for Economic Research

Knut Roed

Ragnar Frisch Centre for Economic Research; IZA Institute of Labor Economics

Date Written: June 2007

Abstract

We find that the lifecycle employment profiles of nonwestern male labor migrants who came to Norway in the early 1970s diverge significantly from those of native comparison persons. During the first years after arrival almost all of the immigrants worked and their employment rate exceeded that of natives. But, about ten years upon arrival, immigrant employment started a sharp and steady decline. By 2000, the immigrant employment rate was 50 percent, compared to 87 percent for the native comparison group. To some extent, the decline in immigrant employment can be explained by immigrants being overrepresented in jobs associated with short employment careers. But we also identify considerable disincentives embedded in the social security system that contribute to poor lifecycle employment performance of immigrants with many dependent family members. Finally, we uncover evidence that labor immigrants are particularly vulnerable to the state of the economy and face a high probability of permanent exit from employment during economic downturns.

Keywords: labor migration, labor market outcomes

JEL Classification: F22, H55, J21, J61

Suggested Citation

Bratsberg, Bernt and Raaum, Oddbjørn and Røed, Knut, When Minority Labor Migrants Meet the Welfare State (June 2007). IZA Discussion Paper No. 2872. Available at SSRN: https://ssrn.com/abstract=999362

Bernt Bratsberg (Contact Author)

Kansas State University - Department of Economics ( email )

Manhattan, KS 66502-4001
United States

University of Oslo - Ragnar Frisch Centre for Economic Research

Gaustadalleen 21
N-0349 Oslo
Norway

Oddbjørn Raaum

University of Oslo - Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0317 Oslo
Norway

Knut Røed

Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0349 Oslo
Norway

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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